Task force targets unlicensed contractors
Unlicensed contractors in North Dakota have gone mostly unnoticed. Not anymore. Wednesday, a task force from three state agencies randomly checked contractors for licenses at Fargo and West Fargo construction sites. Six of 12 contractors checked ...
Unlicensed contractors in North Dakota have gone mostly unnoticed.
Wednesday, a task force from three state agencies randomly checked contractors for licenses at Fargo and West Fargo construction sites.
Six of 12 contractors checked didn't have the proper workers compensation coverage or a North Dakota contractor's license. Those type of violations could prompt officials to shut down a construction site.
"The goal is to get them into compliance and pay their fees," said Mark Armstrong, spokesman for North Dakota Workers Compensation, which teamed with the North Dakota Attorney General's Office and secretary of state to form a construction compliance task force.
"Before this, there was no way to check if people were following the rules," he said.
Currently, there are 5,765 contractors with licenses in North Dakota, according to secretary of state statistics.
Officials, though, don't know how many contractors are working in the state without a license, a scenario that puts employees at risk and gives those contractors an unfair advantage over competitors.
"They're trying to cut corners," Armstrong said. "We're out here to ensure there is a level playing field. They can get jobs at the expense of everyone else."
Unlicensed contractors often bid jobs lower because they're not paying license fees. All contractors must have a North Dakota license for jobs worth $2,000 or more.
The task force formed after officials noted an influx of out-of-state contractors to re-side and re-shingle Bismarck homes after a multimillion-dollar hail storm last year.
"We don't want out-of-state contractors coming in and competing on an unleveled playing field because they're not paying the same fees," said Parrell Grossman, consumer protection director for the North Dakota attorney general's office. "It creates a competitive disadvantage."
Officials usually give a contractor a warning and one day to comply with state laws if they are in violation.
If a contractor fails to comply on a second visit, the construction site is shut down.
This summer, officials shut down four sites in Bismarck. At least one Fargo business may be forced to stop because it didn't get a license.
One concern for North Dakota Workers Compensation is whether contractors are claiming employees are subcontractors.
If a contractor fails to insure employees, the violation can be prosecuted as a Class A misdemeanor. Contractors who lie about the number of employees can face a Class C felony if the difference between the amount they paid and the amount they should have paid is more than $500.
Those who refuse to pay workers compensation insurance are spreading the cost to other contractors and businesses which do pay premiums, Grossman said.
"The people who are following the rules are glad these guys (the task force) are out checking," he said. "The people who aren't following the rules, we're following up on. We'll check back with them."
One contractor who officials checked Wednesday let his contractor's license expire in March 1997.
Two contractors from Minnesota claimed Wednesday they weren't aware of the North Dakota license requirement. They said they thought their Minnesota license covered work in Fargo.
There is no reciprocity agreement between Minnesota and North Dakota, Grossman said.
Anyone hiring a contractor should ask to see a contractor's license and, if the firm is from out of state, a transient merchant's license, Armstrong said.
Between May 28 and Monday, the task force checked 148 job sites in 12 cities.
Of those, 29 contractors didn't have workers compensation coverage and 46 employers face penalties for operating in North Dakota without the proper license or for hiring illegal aliens.
Through the task force, contractors have paid nearly $32,000 more for required workers compensation coverage.
"The results have been significant, so we want to do more of these," Armstrong said. "We want to know we're going to check up on them."
Readers can reach Forum reporter Steven P. Wagner at (701) 241-5542